The government of Egypt has placed a strong emphasis on infrastructure development and construction as key engines of urban growth and financial stability in the years since the country embarked on an ambitious IMF-backed economic reform programme in 2016. Egypt’s road networks, power production capacity and rail infrastructure have expanded rapidly in recent years, underpinned by population growth, a desire to increase exports and efforts to capitalise on the country’s strategic location.

Much of the sector’s underlying demand is a result of the growing population, in conjunction with a wider drive to decentralise Cairo’s population density. This, in turn, has created a need to develop additional infrastructure – particularly new cities such as the New Administrative Capital (NAC). Such mega-projects look set to propel construction activity from 2022 onwards. “Egypt’s growing population is the primary driver of construction activity,” Tarek Youssef, CEO of local construction firm Concrete Plus, told OBG. “While the country was able to navigate the Covid-19 pandemic without experiencing some of the most severe economic and health challenges seen in other countries, it highlighted the need to strengthen infrastructure.” Moreover, private sector investment will be increasingly key in meeting the goals of Egypt Vision 2030 as the country emerges from the Covid-19 pandemic.


Housing and urban development is overseen by the Ministry of Housing, Utilities and Urban Communities (MHUUC). The New Urban Communities Authority – affiliated with the MHUUC – is tasked with offering land for co-development under revenue-sharing agreements with private developers. The Ministry of Planning and Economic Development (MPED) ensures that the sector is managed in line with country’s development plans.

The Ministry of Local Development (MLD), for its part, is responsible for establishing building controls and requirements. Another important player is the Federation of Egyptian Industries, founded in 1922. The federation is home to a number of important actors in the construction industry, including the Building Materials Chamber and the Cement Division, the latter established in 2013 to develop the segment and promote its competitiveness on a global scale.


Egypt’s government has been working on various reforms and policy initiatives to support its urban agenda. Central to these efforts are public-private partnerships (PPPs), which the authorities are promoting in the construction sector. The PPP Central Unit housed in the Ministry of Finance is central to these efforts. Established in 2006, the agency seeks to leverage cooperation for project financing, reduce the government’s need for sovereign lending and ease the burden on the state budget.

Highlighting the importance of PPPs, according to the “Global Infrastructure Outlook” report published by the G20, Egypt will need $675.6bn in investment over the 2016-40 period to meet its infrastructure needs. The report estimated that the government would be in a position to provide up to $445bn of this figure, with the rest sourced from private players and international organisations. Given the fiscal challenges of 2020-21, the private sector will likely need to play an even more important role as the economic effects of the pandemic have affected the government’s capacity to fund large-scale projects in the short term. Indeed, PPPs look set to be a key factor in the sector’s trajectory in 2022 and beyond.

The government has also worked to improve standards and compliance. In March 2020 the Parliament approved the Unified Building Code, which had been in the works for several years. The legislation imposes harsher penalties on violations of the building code and on any state officials who do not penalise these violations, particularly for building on agricultural land. It also extends the validity of building permits from one to three years. In May of that year a sixmonth ban on construction permits in urban centres was announced, while at the same time the MLD required all private housing developers to halt operations until they present plans that meet legal requirements for construction. While these measures pushed demand for construction materials downwards during the suspension period, in the longer term the prevention of illegal construction works will create opportunities for developers to meet low-cost housing demand and benefit the wider economy.

Performance & Size

Egypt’s construction sector maintained a positive trajectory over the 2020-22 period despite pandemic-related challenges and the halting of construction in response to building code violations. In FY 2018/19 the segment contributed LE320.8bn ($20.4bn) to GDP at current prices, or around 6% of GDP, according to the MPED. This figure rose to LE374.7bn ($23.8bn) and LE429.2bn ($27.3bn) in FY 2019/20 and FY 2020/21, respectively. This reflected annual growth rates of 4.4% and 6.8% in FY 2019/20 and FY 2020/21, respectively. While down from an annual mean of 9.6% over the 2016-19 period, continued expansion underscores the resilience of the sector in the face of external challenges.

In addition to being a key driver of growth, the construction sector is a critical employer. In 2020, 3.5m people were employed in the industry, up from 2.7m in 2010. Large labour-intensive projects such as the NAC, New Alamein and other new cities – as well as transport infrastructure developments – helped to sustain employment levels during the pandemic.

Major Projects

Large-scale projects such as the construction of new smart cities – particularly the NAC some 35 km east of Cairo – have been a priority in the sector (see analysis). They have also strengthened the position of local businesses, which are important partners in the private sector. “The series of mega-projects carried out in recent years has added significant value to local construction firms, which have developed a depth of knowledge,” Sayed Farouk, president and CEO of the Arab Contractors, told OBG. “Egyptian companies that have developed resources and experience through the completion of these projects are in a position to offer their services at a competitive price when compared to international firms.”

According to Deloitte’s 2020 “Africa Construction Trends Report 2020”, Egypt was a leader in construction projects by number and by value for the year. Indeed, with 40 projects valued at $93.6bn, Egypt accounted for 84% of North Africa’s overall project value. The report highlighted the $60bn NAC as the region’s most valuable project, and noted that the country accounted for eight of the top-10 projects by value. The other projects cited included the $4.8bn Cairo Metro Line 3 project, which will span 17.7 km and comprise 15 stations; the $4.5bn East Cairo-NAC monorail, which will run 54 km and include 22 stations upon completion in 2023; and the $4.5bn, 50-km King Salman Bridge, also called the Saudi-Egypt Causeway.

In addition to the metro line, in October 2021 the National Authority for Tunnels granted a $4.5bn rail construction contract for the first phase of Egypt’s high-speed electric rail to a consortium including German multinational Siemens and local firms Orascom Construction and the Arab Contractors (see Transport & Logistics chapter). The 1800-km line is expected to create 15,000 direct jobs, transport over 30m people annually and increase freight capacity by up to 15% upon completion, targeted in 2027. Operations for the first phase will comprise of 660 km of rail linking 18 stations from the port city of Ain Sokhna on the Red Sea to Marsa Matrouh and Alexandria on the Mediterranean Sea.

The acceleration of this raft of projects is helping to raise standards in the industry, and will ultimately boost competitiveness and create opportunities for investment in the long run. “Egypt has made solid progress in expanding its production capacity in recent years, and demand will continue to rise as investment is made in manufacturing and industry,” Alaa Kamal, managing director of engineering firm INP Egypt, told OBG. “There will be significant opportunities within the power generation and distribution segments in the medium term to accommodate this growth. These projects can also increase the environmental sustainability of Egypt’s power sector.”

Another major project is the expansion of Cairo Metro. Construction of the LE6.3bn ($400.3m) first phase of Line 4 will comprise laying 19 km of rail for 16 stations, and is set for completion in 2026. In November 2020 a consortium including Orascom Construction and Japanese firm Mitsubishi were awarded an $800m contract for the signalling, power supply, fare collection and track work of the new line. This was followed by the National Authority for Tunnels awarding a contract to Orascom and French company Thales in June 2022 for the design and construction of telecommunications, central control and ticketing for the line. In the coming years such transit works will promote growth, help leverage the country’s strategic location and serve the needs of the large population. “By improving rail and logistics infrastructure, Egypt will be able to leverage its geostrategic location better, at a time when global supply chains are under pressure,” Waleed Abdel Fattah, senior vice-president and managing director for Africa at Hill International, told OBG.

With Egypt revealing plans in January 2022 to bid for the 2036 Olympics, a successful pitch – which would be a first for both Africa and the Middle East – is expected to further bolster demand for the construction of transport infrastructure, accommodation and sporting venues. Such a development would further raise the competitiveness of the construction sector, as occurred in Qatar in the run up to the country hosting the 2022 FIFA World Cup.

Building Materials

The prices of building materials fell in early 2020 as activity slowed due to the onset of the pandemic, a trend reflected in global commodity prices. In March 2020 cement and steel bar prices dropped by 3% and 4%, respectively, compared to the previous month, while the volume of cement sold in 2020 fell by 4.8%, from 43.8m tonnes in 2019 to 41.7m tonnes. The sales of building materials was supported by the fact that activity on the NAC and other projects resumed by May of that year, ensuring a source of continued demand, even as the pandemic put external pressure on prices.

The segment was also aided by a move to mitigate the effects of the health crisis, reduce production costs and increase the competitiveness of Egyptian companies on a global scale. In March 2020 the government lowered natural gas prices for industrial use to $4.50 per 1m British thermal units (Btu). This was down from $6 per 1m Btu for cement producers at the close of 2019, and $5.50 per 1m Btu for iron, steel, aluminium and copper manufacturers.

In 2021 the commodity price trajectory reversed in markets around the world: due in part to this trend, the prices of different construction materials in Egypt rose between 13% and 51% year-on-year in the first half of 2021. In October of that year Egypt reversed the natural gas price cut, raising the cost by 27.8% to $5.75 per 1m Btu for high-consuming industries such as cement, iron and steel.

Further intervention helped to raise cement prices in 2021. With supply outpacing demand, in early July of that year – and after months of talks between the Ministry of Trade and Industry, and local cement producers – a production cut was approved by Egypt Competition Authority. According to the agreement, a one-year baseline production cut of 10.7% was effective starting July 15, 2021. Within a few days of the announcement, local media reported a LE50 ($3.18) per tonne increase in the price of cement. Indeed, cement prices rebounded 20% between January and August that year, to LE900 ($57.19) per tonne. As of May 2022 the price of Portland cement ranged from LE1260 ($80.06) to LE1290 ($81.97), an increase of around 57% from end-2019 figures, when it cost LE800 ($50.83) per tonne. This points towards a positive growth trajectory for the segment as Egypt’s mega-projects combine with the global return to economic activity and recovering oil prices to buoy construction activity in 2022 and beyond.


Egypt’s public sector maintained robust construction investment levels in recent years despite external headwinds, contributing LE33.3bn ($2.12bn) in investment in FY 2020/21 – a figure roughly equal to the FY 2017/18 level of LE33.6bn ($2.13bn), but up from the LE29.6bn ($1.88bn) invested in FY 2019/20, according to MPED data.

A 2021 report from the ministry revealed that between July 2014 and June 2021 the value of the government’s completed building projects and those under way exceeded LE4trn ($254.2bn) across 25,000 projects. The publication tallied 16,000 completed projects between July 2014 and December 2019 alone. Of these, 4446 projects valued at LE296bn ($18.8bn) were in Upper Egypt. Border governorates accounted for 1498 projects, with a value of LE182bn ($11.6bn). The oil and mineral sector accounted for the highest value of total and completed projects, with LE1.1trn ($69.9bn) across 326 undertakings. The majority of large-ticket projects were completed prior to 2020, with 229 projects worth LE47bn ($3bn) still under way during 2020-21.

A sectoral breakdown of the remaining projects highlights the government’s focus on sustainable development in terms of both environmental and social criteria, and the commitment to transport infrastructure development for long-term growth and quality of life improvements. Works related to housing, utilities and informal settlements accounted for the largest value of projects completed, at LE830bn ($52.7bn) across 3696 projects, while 2270 projects valued at LE622bn ($39.5bn) were still under way. Electricity and renewable energy accounted for the second-highest value of projects already completed, at LE387bn ($24.6bn) over 538 projects, while 43 projects valued at LE88bn ($5.6bn) were still ongoing. Meanwhile, health and education represented the highest number of total and finished projects: the sectors accounted for 4660 completed projects valuing LE46bn ($2.9bn); by mid-2020, 846 higher-ticket projects were still in process at an investment of LE100bn ($6.3bn). In the transport sector LE478bn ($30.4bn) worth of developments in 146 projects were ongoing, while 531 projects were completed for LE175bn ($11.1bn).

This focus on the sustainable development of resources, housing, health, education and transport underscores the public sector’s focus on enhancing quality of life, mitigating environmental risk and unlocking productivity-driven growth. These principles are aligned with Egypt Vision 2030 and broader global development goals (see Economy chapter). The topic of sustainable cities is also on the agenda of the COP27 UN Conference on Climate Change, to be hosted in Sharm El Sheikh in November 2022.

Other segments poised for growth in the coming years include those related to technological advancements, such as building information modelling and modular construction, which will help raise the industry’s competitiveness and increase its investment appeal. This follows a trend seen in sectors across the economy. “The construction and real estate sectors have been slower to incorporate digitalisation, new technologies and sustainability into projects and developments than other areas of the economy,” Bishoy Azmy, CEO and executive director of construction firm ASGC Group, told OBG. “However, I believe the industry is ripe for disruption and there are opportunities to innovate and create products that address evolving customer needs – not least of which is affordability – partly by adopting technologies that enhance productivity, and partly by rethinking various stale parts of the process, such as design and procurement.” Despite enthusiasm for new tools and processes, the integration of advanced technologies will likely come with a learning curve. “The acceleration of digital solutions and the introduction of artificial intelligence look set to present one of the sector’s standout challenges in the short to medium term,” Ehab Mokhtar, CEO of local design firm IDIA Architects, told OBG.

The construction sector has received a boost from international donors and multilateral financial institutions in recent years. Combined with the active promotion of private sector participation and robust public sector commitment to development and opportunities presented by Egypt’s mega-projects, this has helped strengthen the industry’s competitiveness and raised the appeal for foreign investment. Foreign direct investment (FDI) in the construction sector reached $884.2m in FY 2019/20, according to the latest data from the Central Bank of Egypt, representing 5.6% of total FDI inflows. This marked a considerable increase from $691.8m – equal to 4.2% of the total – the previous fiscal year. Indeed, the development of new cities, transport networks and other mega-projects look set to present a range of opportunities for local and foreign investment in the coming years.


Construction is viewed as a key driver of urban growth and financial stability, particularly with a renewed focus on Egypt Vision 2030 as the country emerges from the economic challenges seen in the 2020-21 period. While the government remains committed to providing financing to the sector, strengthening the regulatory framework and improving compliance, private investment and PPPs are set to be central tools in the country’s efforts to sustain its development programmes. Improvements to the transport network and a focus on sustainable development will help to unlock productivity-driven growth, serve an expanding population and capitalise on Egypt’s strategic location in the wider region.